Stocks, US equity futures rise as treasuries slip: markets wrap

Gold was at $1 828.21 an ounce, up 0.4%.

Stocks rose Friday after Federal Reserve Chair Jerome Powell again pushed back against speculation of steeper interest-rate hikes and as cryptocurrencies rebounded from a plunge that captivated markets.

An Asian share gauge climbed 1.5%, aided by rallies in Chinese technology stocks and in Japan, where SoftBank Group Corp. surged. US and European futures advanced after an intraday rebound left the S&P 500 little changed.

Abating panic in the highly speculative cryptocurrency market may be helping sentiment. Bitcoin added about $2 000 to top $30 000.

Powell reaffirmed the Fed is likely to raise rates by a half point at each of its next two meetings and isn’t “actively considering” a 75 basis-point move.

A dollar gauge dipped but remains on course for its longest streak of weekly gains since 2018. Treasuries gave back some of their recent rally, taking the 10-year yield to about 2.89%. The yen retreated.

Powell left open the possibility of doing more if needed to get high inflation under control. Concerns that tightening monetary policy will spark an economic downturn continue to shadow markets and have tended to snuff out rebounds. China’s Covid lockdowns and Russia’s war in Ukraine have also roiled a range of assets this year, leaving world shares near a bear market.

It’s a “very tough time,” Kathy Entwistle, managing director at Morgan Stanley Private Wealth Management, said on Bloomberg Television. “We’re holding just still and quiet and patient and waiting for some more insights as to where we’re going. We still see a lot of volatility on the horizon.”

In China, Beijing officials denied the city will be locked down. Shanghai said it plans to achieve “no community spread” of the virus by mid-May.

Oil prices scaled $107 a barrel and wheat prices rallied, partly as the war continues to impact commodities.

European Union nations say it may be time to consider delaying a push to ban Russian oil if the bloc can’t persuade Hungary to back the embargo. Wheat production in Ukraine, one of the biggest growers, will fall by one-third compared to last year, according to a US forecast.

Here are key events to watch this week:

  • University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures rose 1.1% as of 6:24 a.m. in London. The S&P 500 fell 0.1%
  • Nasdaq 100 futures added 1.6%. The Nasdaq 100 fell 0.2%
  • Japan’s Topix index climbed 1.8%
  • Australia’s S&P/ASX 200 index rose 1.8%
  • South Korea’s Kospi index increased 1.9%
  • China’s Shanghai Composite index rose 0.6%
  • Hong Kong’s Hang Seng index added 2.1%
  • Euro Stoxx 50 futures rose 1.1%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%
  • The euro was at $1.0395, up 0.1%
  • The Japanese yen was at 128.95 per dollar, down 0.5%
  • The offshore yuan was at 6.8132 per dollar, up 0.2%

Bonds

  • The yield on 10-year Treasuries rose four basis point to 2.89%
  • Australia’s 10-year yield dropped two basis points to 3.41%

Commodities

  • West Texas Intermediate crude rose 1.6% to $107.85 a barrel
  • Gold was at $1 828.21 an ounce, up 0.4%
© 2022 Bloomberg

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